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WOLF BLITZER, CNN ANCHOR: We want to welcome our viewers in the United States and around the world. I'm Wolf Blitzer reporting.

This is THE SITUATION ROOM, Special Report, North Korean crisis.

Numerous of movements are raising fears that North Korea is ready to launch. We are tracking developments that could push the region closer to war.

He is armed and dangerous. We will take a closer look at what may be driving Kim Jong Un to make brazen threats and defy the world.

And dialing it down. The Obama administration addresses concerns that its response to this crisis has only made matters worse.

One of the most dangerous regimes in the world and now North Korea says it's on the brink of war. U.S. officials fear it may be planning a missile launch soon. The threats have been aping up every single day from a nation under the thumb of a young and unpredictable leader.

Kim Jong Un is armed with a huge military, powerful conventional weapons and a nuclear program.

This hour, our correspondents take an in-depth a look at the threat to the United States and the world and President Obama's response.

Christiane Amanpour and Fareed Zakaria, they will give us the global view of the crisis. But we begin with our pentagon correspondent, Barbara Starr.

Barbara, after days of aggressive behavior from North Korea, what should we be looking for right now?

BARBARA STARR, CNN PENTAGON CORRESPONDENT: Well, right now, Wolf, it continues to be a watching and waiting game by the Obama administration to see what North Korea does next. Will they and when will they test launch these ballistic missiles, mobile missiles that they have moved to their eastern coastline? All eyes on that area to see what they plan next. Two mobile missiles what was said to be there by U.S. intelligence.

When could this happen? Then, really, answer of course, is nobody knows, but there's two dates on the calendar being watched very carefully. April 15th, the 101st birthday of Kim Il-Sung, the founder of North Korea, the grandfather of the current leader and also the end of the month. Essentially April 30, because that's when the ongoing U.S.-South Korean military exercise ends, and the concern is the north may feel a little more emboldened at that time - Wolf.

BLITZER: As you know, Barbara, Pyongyang, the regime there, they have been warning foreign embassies in the North Korean capital that maybe this is a good time to start pulling out their diplomats. What do you know about that?

STARR: Well, you know, they are saying this, and there's some sense that they are saying it again for public consumption though. You know, we can't protect your diplomats. No indication of any kind of movement of North Korean forces, troops, artillery, large-scale movements that would indicate any move towards combat operations on their part. Not to say the U.S. isn't worried about some sort of low- scale provocation. But no movement towards large-scale combat.

And very interestingly, for some hours at the end of the week, North Korean TV itself was ratcheting back a little bit, just like the Pentagon, not being so militaristic in its broadcasting, showing more about farmers and that sort of thing. A sense that maybe everybody might be getting ready to step back, but U.S. intelligence still very carefully watch this.

BLITZER: Everybody watching it very very carefully because the stakes clearly are enormous.

Barbara, thanks very much.

Let's get the administration's reaction. Our White House correspondent Brianna Keilar is working this part of the story.

What are they saying over at the White House? How worried are they, Brianna?

BRIANNA KEILAR, CNN WHITE HOUSE CORRESPONDENT: Wolf, White House officials are down playing that there's any new real level of concern here. That they are significantly more concern at this moment. They say North Korea has been on the radar for a while, particularly since December with that ballistic missile test that was successful.

But I'll tell you, the discussions here on North Korea are very much in overdrive, one senior administration official telling me that top officials from the state department, the defense department, intelligence officials have been meeting for really much more frequently here in the last week and a half in the SITUATION ROOM. So. North Korea, really, becoming the most pressing foreign policy issue at this moment for the administration, Wolf.

BLITZER: Brianna, standby.

You can certainly bet Pentagon officials are gaming out North Korea's next moves right now. We're doing the same thing in our virtual studio.

CNN's Tom Foreman is there along with CNN military analyst, the retired U.S. army general James "Spider" Marks.

Walk us through this, Tom.

TOM FOREMAN, CNN CORRESPONDENT: Sure, Wolf.

All eyes right now are, of course, on the east coast of North Korea. Why, general, would they do this missile placement there? Two hostile missile along that coast, why?

GEN. JAMES "SPIDER" MARKS, RETIRED U.S. ARMY: Tom, the east coast is closer to the United States presence in the region, and its allies. They didn't put it on the west coast because they're not trying to threaten China.

FOREMAN: That's simple enough.

All right, let's bring in what we are talking about. And we get to this being the model of the type of missile we are talking about, the Musandam that Barbara mentioned in a minute ago. This is really designed to be used by soviet submarines. The Iranians have a version of this called (INAUDIBLE). It doesn't look like much of a missile. There are no fins on it. But, let's talk about it, because one of the real keys is the mobility, right? We always see there is rage like this. Why does that matter so very much?

MARKS: This is a mobile missile system. It can go anywhere and it can launch from many location. All it needs is a piece of level terrain and within minutes, Tom, this thing can launch.

FOREMAN: And let's talk about the capability of this, as well. We are going to bring in some of the stuff on this. Fairly big and a lot of different ways which it can be presented, yes?

MARKS: Tom, this is about 40 to 60 feet length. It has got a payload of 2 1/2 tons. But, what's important is the warhead. We do not anticipate that it has a nuclear warhead at all. We think it's high explosive.

FOREMAN: So HE, high explosive, that is the concern right there.

MARKS: Right.

FOREMAN: And yet, when you talk about a high explosive weapon like this, the question though becomes range what it can hit.

Let's bring in the map and talk about that a little bit, of course. As Barbara pointed out, you're talking about maybe 2,500 miles, possibly a one or two-stage missile. If it's two stages, it might be able to get that far and so much of one stage. And it becomes somewhat less reliability. But, even best case scenario, they launch this, California has nothing to worry about?

MARKS: Tom, the mainland United States is not at risk at all. Hawaii is not at risk. Possibly the west coast of Alaska. But, what is at risk is Korea, Japan and certainly down in Guam, very much so underneath that umbrella. FOREMAN: And Guam really matters.

MARKS: That's very important. That's where the United States air force has a very large b-52 bomber presence. Those bombers are used in the defense of the peninsula. So it's critical that they stay protected.

FOREMAN: And of course, sends a thousand of troops in other areas here. One last question about all of this. If in fact this launches, one of these missiles, two of these missiles launch there, whether or not North Korea says it's a test, what happens immediately with all of our forces?

MARKS: Tom, when that missile launches, it sends off an IR, infrared signature which has picked up from our satellite in space. It is then tracked by sea, land and air-based radar. And it will determine that totally automated system will determine the attitude, the Azimuth and the location of where that missile is heading.

FOREMAN: So, computers are tacking. And this is, by the way, an inertia guided missile. Once this launches, no guidance on it so, they will know where it's going and if it's headed towards any U.S. or allied target. A ship, land, anything, what happens?

MARKS: That missile will be taken out by a high altitude anti- ballistic missile system. It will be gone.

FOREMAN: So, there are many many steps, as you can see, Wolf, in the analysis of where these missile will maybe and what North Korea's intentions maybe. But, the response, no matter what they say, would largely be the same - Wolf.

Christiane, what is motivating all this tough talk from Kim Jong Un and his generals in North Korea?

CHRISTIANE AMANPOUR, CNN CHIEF INTERNATIONAL CORRESPONDENT: I think it's anybody's guess and people have tried to psycho analyze Kim Jong Un ever since he's come in particularly in these last couple of weeks.

Obviously, some people saying he is trying to prove himself to his people, prove himself to his own hardliners, perhaps he has prove himself to those who may be pulling the puppet strings, who knows? What we know is what is being said and what the reaction is.

But, we also know and I spoke to professor (INAUDIBLE), the last American who have gone into Yongbyon, the nuclear plant that they have. He said, and he's very confident that they do not have the nuclear capability, as the general says, to threaten either South Korea or the United States. They could perhaps deliver some kind of warhead to South Korea, but not on a missile. Maybe by plane, maybe by ship or truck, but they don't have that ballistic delivery capability.

They also, if they restart Yongbyon, which they have said that they would that the plutonium reprocessing plant, it could take six months to a year. Remember, we went in there. I went in there in 2008. I watched them disable it. That was sort of a honeymoon period between North Korea and the west, as they disabled it. And then, it sort of comes to where it is right now. They said it could restart within six months to a year.

BLITZER: Those were the good old days. Not so good these days, right now. Fareed, the fear is though, there could be a miscalculation. Even though no one thinks North Korea is suicidal, they know they would be destroyed if they did something drastic. But, if there was an incident and the new government in South Korea responded, who knows what would happen?

FAREED ZAKARIA, CNN HOST, FAREED ZAKARIA GPS: That's right, Wolf.

The problem is, imagine one of these missiles is launched. They activate km-8 missiles, the km-8 missiles. They don't have nuclear warheads small enough to put on them, so they would be high explosive. But they launch into the sky. We have destroyers that have face the ray egis radars track them. We fire our own missiles, the SM intercept and destroy it. Then the North Koreans feel they've lost face. They have to do something. They start attacking South Korean patrol boats.

You see, that's the danger. Nobody wants this to happen. I think the Obama administration is playing this just right, which is this is at some level bluster. What you don't want to do is overreact to it, which then forces them to show that they are actually serious, and then you go down and kind of tit for tat game.

So, you have to provide assurance and deterrence, assurance to the Japanese and the South Koreans where the most concern. You have to deter the North Koreans, but you can't play into this game. Because they are both somewhat irrational. They don't have very good command and control, one had to assume. And there could be some kind of miscalculation.

BLITZER: Does he really think he can get concessions, Kim Jong- Un, money from China, from the South Korea, from the United States by this tough talk?

AMANPOUR: Well Wolf, it's a pattern that has happened over the last decades with this regime. They do believe that they can, and they've been able to do this sort of extortion policy, if you like, in this regard. Obviously, nobody wants to let that happen right now.

The United States is now saying, and you heard Barbara Starr said, the state department they said it today, they want to dial back. They want to perhaps give some kind of diplomacy an outlet. What they probably will not be doing over the next several weeks is these joint military games continue between the South Koreans and the U.S. They probably won't be showing some of the more demonstrable shows of force, like I know marine amphibious landing on the coast, they probably won't be showing that. And if they do, that also could be an issue.

But I think, the diplomacy is the problem and they haven't had real diplomacy between either the Obama administration or the Bush administration and this is what's having a major problem.

BLITZER: Is it time to send some sort of diplomatic envoy to Pyongyang on behalf of the president of the United States?

ZAKARIA: Well, the Bush administration actually did try diplomacy. They signed two agreements with the North Koreans. They have plenty of people did. The problem is, as Christiane pointed out, they cheat on them. They have cheated on every one of these.

There's only one country with whom diplomacy would with North Korean and that is China. The Chinese provide 50 percent of North Korea's food, 80 percent of its fuel. There are people in China who liberally open the taps and allow North Korea to survive.

The problem is the Chinese have never thought that they could put the real pressure on the North Koreans without danger of the regime collapsing. So as for the Chinese, they worry about all this stuff. They don't like this, you know, the unpredictability of this regime. But they don't want to see North Korea collapse.

What is that mean? It means millions of refugees into China, more importantly it means almost inevitably, the unification of the Koreas, north and south, in a kind of eastern and western style, on South Korean terms. So, see what you have on China's border. A very large Korea with Seoul as the capital, with 40,000 American troops, a treaty alliance with the United States and nuclear weapons.

BLITZER: Guys, it's a complex complex situation, but it's perilous right now. We are going to continue this conversation.

Also, a broader look at North Korea's military and massive firepower. The danger goes much deeper than simply one missile test.

(COMMERCIAL BREAK)

BLITZER: The North Korean leader Kim Jong Un, he is a big reason why this crisis is so uncertain and so dangerous. He's young, virtually unknown and this is his first big test in the global arena.

CNN's Kyung Lah put together what we know about him.

(BEGIN VIDEOTAPE)

KYUNG LAH, CNN CORRESPONDENT (voice-over): He's the third of the Kim dynasty. A man not yet 30, in command of a nuclear arsenal, ballistic missiles, and the world's fourth largest army. But Kim Jong Un is in many ways an enigma, and a dangerous at that. The youngest son of Kim Jong-Il, he had a privileged upbringing, while millions of North Koreans starved attending an elite boarding school in Switzerland under a false name. A Brazilian classmate remembers him as a shy teenager.

JOAO MICAELO, KIM JONG-UN'S CLASSMATE: He was very quiet. He didn't speak with anyone. He was very competitive at the sports. For him, he didn't like to lose.

LAH: He liked basketball and football, and video games. His father had served a long apprenticeship before taking over the Hermit kingdom. But Kim Jong Un was catapulted into the leadership suddenly becoming a general in his mid-20s without serving a day in the military. When his father died in December of 2011, Kim Jong Un became supreme leader and the state propaganda machine went into overdrive.

DANIEL PINKSTON, INTERNATIONAL CRISIS GROUP: They have been trying to establish this myth regarding his expertise, he speeds eight languages, he's a military genius and technical genius.

LAH: And a leader with the complete backing of the military.

In his first public remarks as leader , he spoke of the heartbreak of a divided Korea. But there was also a warning.

KIM JONG UN, NORTH KOREAN LEADER (through translator): Our military has become a powerful military, able to handle any kind of modern warfare with complete offensive and defensive capabilities. The foreign powers are not the only ones with monopoly on military supremacy.

LAH: As he's consolidated his rule, Kim has tried to promote his youthful side, attending a concert with Disney characters, and a youth festival, watching basketball with Dennis Rodman.

Kim Jong Un has also married. His young, attractive wife was announced by state media as comrade, RI Sol-ju. But he is also re- enforced North Korea's military first policy.

With the successful launch of a ballistic missile in December and another underground nuclear test in February.

Kyung Lah, CNN. Seoul.

(END VIDEOTAPE)

BLITZER: We have all seen pictures of North Korea's military parading its weapons and troops through the streets of Pyongyang. In just a minute, we will give you a closer look at what it has and the deadly capabilities there. (COMMERCIAL BREAK)

BLITZER: North Korea's nuclear capabilities are an open question. Their conventional military is heavily equipped capable of inflicting a men's casualties and damage on the millions and millions of people just below to the militarized zone.

Let's go back to CNN's Tom Foreman and retired U.S. army Spider Marks for more on this -- Tom.

FOREMAN: Yes, Wolf. There's a tremendous amount of power in the hands of this young man. Let's go through a little bit if we can.

Spider, let's talk about this nuclear capability first. What do we really think they have right now?

MARKS: Tom, we think they have eight bombs. They probably have the materiel for 12. But we don't think these are weaponized. They have been married up with a missile capability to launched it someplace else.

FOREMAN: So, they are weapons, but as long as they're not able to be delivered well, they are not weaponized.

MARKS: Correct, correct.

FOREMAN: But, what about the other hardware they have. They have a tremendous amount of artillery and rockets, missiles, things like these. Talk about that some.

MARKS: The North Korean military, the Korean people army was trained by the soviets and trained by the Chinese communists. So they rely on volumes and volumes of artillery fire. So they have a massive amount of artillery and surface-to-surface missiles. We would see those at the start of the conflict.

FOREMAN: And a lot of these artillery has been dug in. Ever since the end of the Korean consul, they have been preparing for 50 years for the next one.

MARKS: They sure have. They sure have. Completely where the armistice was signed, when the cease-fire was signed back in '53, 1953, is where a lot of those units remain today.

FOREMAN: OK. And beyond that, there is the question of the sheer number of people that they have for a really quite small country, massive army.

MARKS: They have the fifth largest military in the world. Over one million men under arms. That's on the active component. The reserve component has about eight million folks. And that's about the largest reserve component military in the world and they can be mobilized at a moment's notice.

FOREMAN: Are they generally considered to be well trained? MARKS: They are -- the active component very well trained. And in fact, When you compare the military to the population, the military has a much higher level of nutrition, training. So, they are prepared.

FOREMAN: A couple of things let's talk about here. They have a Navy, so to speak. They have an air force. They have submarines. But we don't think of those in the traditional way we do other forces like that.

MARKS: Tom, let me talk about the air force for a second. Our primary concern about their air force is for the insertion of their very large, over 100,000 special operation forces. Now, the Navy can also insert special operation forces, immediate submarines and other type of water craft that we have. Then they would activate sleeper agents that are in the south. And they would go after targets to disrupt the decision making capability of the United Nations command.

FOREMAN: So the simple truth is, Wolf, even if you get past the nuclear question here, there is a formidable military force in North Korea right now -- Wolf.

BLITZER: That's huge indeed. It could cause enormous destruction and disaster. Guys, thanks for that report.

Still ahead, an administration insider on President Obama's North Korea playbook and what's worrying him most right now.

And life in North Korea. As I saw it when I was there during another time of crisis in the region.

(COMMERCIAL BREAK)

BLITZER: Happening now, North Korea's dangerous new military moves. One miscalculation by either side could be a disaster. National security insiders tell us what they are learning about the U.S. response.

Thousands of Americans are at risk on the Korean peninsula right now. We're going to explore America's stake in a region that could explode literally.

And any moment, Kim Jong Un's new pal. Did the former NBA star Dennis Rodman have any influence at all on the North Korean leader or on his plan of attack?

I'm Wolf Blitzer. And this is the SITUATION ROOM, Special Report, the North Korean crisis.

The Obama administration is struggling right now to calm an explosive situation in North Korea. As we reported, Kim Jong Un may be gearing up for a new missile launch soon after weeks of warmongering.

Take a look at how he's been ramping up tensions in the region.

(BEGIN VIDEO CLIP)

BLITZER: Tensions began to skyrocket in mid February when North Korea went ahead with its third nuclear test. A furious U.N. security council hit back a few weeks later, imposing punishing new sanctions.

The U.S. began planned war games with South Korea and the north said it was pulling out of the agreement that ended the Korean War. Direct threats against America intensified. North Korean TV aired a video simulating an attack on the White House and the Capitol building.

In a show of force, the U.S. added nuclear capable B-2 stealth bombers to its military drills with South Korea.

Then, Kim Jong-un put his forces on standby to strike the U.S. mainland, Guam and Hawaii. And he declared a state of war with the South.

U.S. stealth fighter jets joined those war games in the region.

And the threats went nuclear. North Korea said it would restart a closed plutonium reactor. And the regime claimed its plans for a nuclear attack on the U.S. were ready to go.

The U.S. has ordered missile defenses to nearby Guam as fears grow that North Korea may be planning a launch soon.

(END VIDEO CLIP)

BLITZER: We've assembled our own security council here in THE SITUATION ROOM, including some of the more knowledgeable folks about North Korea, to try to break all of this down for you.

Joining us now is Tommy Vietor. He served in the Obama White House. He's a former spokesman for the National Security Council.

Also joining us, Christopher Hill. He's former U.S. ambassador to South Korea. He's now dean of the School of International Studies at the University of Denver.

And retired U.S. Navy Admiral William Fallon. He served as the head of the U.S. Pacific Command and U.S. Central Command.

Admiral Fallon, what worries me the most is a miscalculation that could trigger all-out war. Am I overly concerned or are you concerned about that as well?

ADM. WILLIAM FALLON (RET), FORMER COMMANDER, U.S. PACIFIC COMMAND: Wolf, I think it's prudent to be concerned, and certainly pay close attention to this. But I believe this thing may be a little bit overhyped right now.

BLITZER: Tell us why. Tell us why.

FALLON: Well, the first thing is, his ability to strike the U.S., I think, is mostly talk. There's a possibility that some of his missiles might be able to range Alaska, or possibly a U.S. territory or bases closer in. But unlikely, they've never demonstrated an ability to get anything to fly as far as the U.S. It took them many years to try to get that one missile that we call the Taepadong-2 to fly.

So, I think there's an awful lot of rhetoric. It's not helpful, of course, but this is -- this is a lot of the same old stuff out of the playbook that his father and grandfather used. And it's unfortunate.

You've got to wonder what he's up to, and what the real motivation is, whether he's just trying to act strong in front of his military people. Or again, what's worked in the past, in some instances, is to act outrageously and then demand some kind of concession, and move on.

But it is a time to be very attentive. I think we've made, the U.S. has made some very prudent moves. We have a significant missile defense capability. I think our people are certainly up to the task. And from what I can see -- I don't get any daily intel reports anymore, but I -- it looks to me like we've taken the appropriate precautions.

BLITZER: Where does diplomacy, Ambassador Hill, fit into this? The U.S. does have indirect contacts with North Korea. The South Koreans do. Japan, China. But where -- where should the U.S. be engaged right now, trying to ease this crisis?

HILL: I think there are basically two tracks. One is with our allies, South Korea and Japan. I think it's been very important that we reassure them, and that we not hold back on these annual exercises. So if there's an air component to these exercises, we need to go through that. Because we need to really assure our allies. So that's one track.

The second track is, of course, is with China. China, they may deny that they have a lot of leverage with the North Koreans. But they do. And there's a lot more they can do.

A third possible track might be with the North Koreans. But you know, they kind of started this dance. I'm not sure it would be in our interests to be kind of approaching them. I think to leave in our mind that we're worried, afraid or somehow blinking. So I think we need to be very careful in how we would deal directly with the North Koreans. I'd rather see a -- much more of an effort with China.

BLITZER: Tommy Vietor, you know that back when he was a candidate in 2007, 2008, President Obama at that point made it clear, he's willing to talk to these kinds of despots, if you will, without pre- conditions. Dennis Rodman came back from North Korea saying, call -- call him. Kim Jong-un. Do you think that's something the president would even consider?

TOMMY VIETOR, FORMER SPOKESMAN, NATIONAL SECURITY COUNCIL: Huge thank you to Dennis Rodman for delivering that message. I think the president has expressed a willingness to have direct negotiations or conversations with North Koreans. But those need to be constructive. And they can't be in the context of these absurd threats and this propaganda and continued nuclear development, continued tests of intercontinental ballistic technology.

And so I agree with what the admiral said. I think that anytime you combine long-range missile technology, efforts to develop a nuclear program, that's something you have to take very seriously.

But the bottom line is, the United States has been working on missile defense technology for years. The administration had recently announced that bill put 14 more ground- based interceptors on the West Coast. They are putting additional radar capability in the region. There are additional military ships in the region, as part of regularly-scheduled military exercises. This is something we're well prepared for. I don't think your viewers should worry that there's an immediate homeland threat, because the North Koreans simply haven't indicated or tested some of the weapons that would give them that capability.

BLITZER: Everybody stand by for a moment. I want to go it the White House right now. Our correspondent, Brianna Keilar, once again is standing by.

So, are they worried at the White House, Brianna, about this escalation that's been going on now for the past few weeks? And whether it has gone too far?

KEILAR: Well, certainly, Wolf, there's a lot of talk among White House officials that they want to see things de-escalate. And you're seeing that in some of their changing rhetoric today.

They also insist, though, that this sort of show of force has been a necessary deterrent to show Kim Jong-un that, if he's going to make good on his threats, there will be consequences.

I will tell you, Pentagon officials have been a little more candid with CNN. And they say that after accusing North Korea of amping up its rhetoric, they're afraid they may have done the same thing.

(BEGIN VIDEOTAPE)

KEILAR (voice-over): Worried that muscular displays of U.S. military might may have pushed North Korea too far, the Obama administration is changing its tone and says North Korea should, too.

VICTORIA NULAND, SPOKESMAN, STATE DEPARTMENT: We have also been saying all the way through, that this does not need to get hotter. That it can -- we can change course here, if the DPRK will begin to come back into compliance with its international obligations, will begin to cool things down.

KEILAR: Secretary of State John Kerry is leading the effort to dial back the discord, sources tell CNN, while behind the scenes at the White House, attention to an increasingly threatening North Korea is in overdrive. A senior administration source says top officials have been meeting more frequently in the situation room for the last week and a half. Deputies from the president's National Security Council, the defense and state departments, the CIA, and the joint chiefs of staff, among others, are at the table. Victor Cha was a top adviser on North Korea to President George W. Bush.

VICTOR CHA, ADVISOR TO PRESIDENT GEORGE W. BUSH: Yes, I think they're watching very carefully the situation. I think they're watching to see if there are military maneuvers, or a higher level of military alert on the ground in North Korea, that is accompanying all of this rhetoric.

(END VIDEOTAPE)

KEILAR: Now, don't expect North Korea to be leaving the headlines anytime soon, though, Wolf. The new President Park will be here next month visiting with President Obama. Their first visit. And it's certainly expected, I would say, that North Korea, as it does at times, may act up and try to steal some of the attention during that time, as well.

BLITZER: Brianna, thanks very much.

Let's go back to our guests for some further analysis right now. There is a new government, Ambassador Hill, in South Korea, and President Park, she's tough. If there is some sort of provocation, I suspect, unlike her predecessor, she might respond right away, and that could escalate a dangerous situation.

HILL: Well, she's tough, but I think the times have changed somewhat. And this North Korean bluster is pretty serious.

So I think the problem is, the North Koreans might feel they can get away with some incident, whereas as you suggest, I think the South Koreans would hit them back pretty hard. And there does appear to be some shift in the rules of engagement. That is local commanders seem to be empowered to move right back at them, rather than phone home to Seoul.

So yes, I think it is kind of a dangerous situation. And as we look at the various paths of this -- of this crisis, I think this kind of inadvertent conflict could be the most serious.

BLITZER: As you know, Admiral Fallon, two years or so ago, when I was in North Korea, the North Koreans did bomb an island; they killed a whole bunch of South Koreans. They attacked a South Korean warship; they killed a lot of sailors. The South Koreans at that point did not retaliate. But I would suspect if they did those things again, the situation would explode.

FALLON: Wolf, I think it's noteworthy that within the last week or ten days, there was an agreement reached between the U.S. and the Republican of Korea. I don't know the details of it, but it sounds to me like it was a heightened effort to consult very closely in the event of some untoward incident, or unpredictable activity on the part of the DPRK.

You know, we worked very, very closely, have for many years with our South Korean allies. There's a well-integrated plan, lots of discussion, and exercises for many years. We work very well together. There's a high level of confidence between the two militaries.

And I think, again, this is a time to certainly be very attentive, to take the prudent precautions, which I believe we're doing. And to consult very closely with our allies in the region, because this is fundamentally a regional issue.

BLITZER: Tommy, you worked with the president for a long time when you were at the National Security Council. Give us a little flavor how he deals with an emerging crisis like this.

VIETOR: Well, I mean, the first thing I'd say, Wolf, is that, you know, these problems with North Korea didn't emerge just recently. And this is something he's been working on for a long time. So his efforts to bolster a missile defense system is going to be critical.

But you're right that, when there's an incident like this, or a series of incidents, that the tempo picks up. The deputy's committee will meet more regularly. And the president will receive regular briefings about the issue, in the BDD and other venues.

But I don't think that the White House is on high alert right now, as a result of these actions. It's something that they've been aware of and working on for a long time.

And the long game here, I think, is going to be conversations with the Chinese. Because the United States can, you know, work to get more sanctions on North Korea and do a variety of other efforts to increase diplomatic pressure.

If the Chinese would just turn the screws a little more, they could have a real impact with North Korea. And they need to stop letting them get away with these -- these temper tantrums.

If cooler heads can't prevail and shooting actually begins, many important U.S. targets could be within range of North Korea's guns and thousands, tens of thousands of U.S. troops. Also coming up this hour, pictures from my own rare visit to North Korea.

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BLITZER: North Korea isn't the only country doing some serious military muscle flexing right now. A pair of U.S. stealth bombers has made the round trip from their base in Missouri to South Korea and back. Plenty of other U.S. fire power is deployed much closer to North Korea and could become targets.

CNN's Pentagon correspondent, Chris Lawrence, is joining us with more on what's going on.

What are you seeing, what are you learning, Chris?

CHRIS LAWRENCE, CNN PENTAGON CORRESPONDENT: Well, Wolf, you've got thousands of American troops stationed just about 15 miles south of the DMZ, and you've got all of North Korea's heavy armor and artillery aimed right at them.

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LAWRENCE (voice-over): Twenty-five miles, it's the magic number as far as American troops are concerned. Some of North Korea's massive artillery can fire up to four mortar rounds a minute, 25 miles away.

RODGER BAKER, STRATFOR: U.S. forces that are near the front are probably going to be within range of the artillery.

LAWRENCE: About 10,000 American troops are deployed to bases around Camp Casey, just 15 miles from the DMZ. Others are concentrated at Osan Air Base. The U.S. recently put radar-evading Raptors on display there and flew long-range bombers like the B-2.

But the risk to troops deployed closest to the DMZ will change. Over the next few years, the U.S. will move them to another base south of Seoul.

BAKER: That means that the bulk of U.S. military forces in Korea are not going to necessarily be within range of the artillery strikes at the beginning.

LAWRENCE: Farther out in the western Pacific, the Navy deployed the USS Decatur and USS McCain, armed with a sophisticated radar system to detect North Korean missiles, and then launch rockets to intercept and destroy them.

The first reinforcements could come from one of the many American bases in Japan, home to the Navy's 7th Fleet and more than 100 aircraft.

And some 2,000 miles away, North Korea threatened a nuclear strike on Guam. Now the U.S. is deploying a land-based missile defense system, somewhat easing fears of an attack on the U.S. territory.

GOV. EDDIE BAZA CALVO, GUAM: Though I hearken to see these -- these improvements in the defense posture, I am concerned, as -- not only as a governor, but as a -- as a man who has a wife and children and grandchildren here.

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LAWRENCE: And you know, those are the -- some of the same concerns that husbands, wives and children here in the U.S. have for their service members who are stationed over there in South Korea.

One of the big advantages that the U.S. has is how quickly they can reinforce troops. Within two weeks, Wolf, they could double the size of their combat aircraft and triple the size of U.S. ground troops in the area.

BLITZER: Yes, and Guam has almost 6,000 U.S. troops who are based there at any one time. Not very far away indeed.

Chris, thanks very much.

North Korea only has two direct neighbors right now, South Korea and China. The saber rattling has nerves on edge in both countries. Let's get the latest from our correspondents in the two capitals, starting with CNN Jim Clancy in Seoul.

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JIM CLANCY, CNN CORRESPONDENT/ANCHOR (voice-over): The South Korean capital could become ground zero if there would be a conflict here on the Korean Peninsula. The people who live here know that it's not the nuclear arms, it is the conventional weapons that are possessed by the North that could reduce this city, or parts of it at least, to ashes in a short period of time.

Older people tell me that this is the most tense time they can remember since the end of the Korean War, some 60 years ago.

Younger people say, "We can't relate to it. We are post-war." They do not believe that Kim Jong-un is going to attack the South. They believe, instead, that what he wants to do is to blackmail South Korea: to get the money, to get the food aid, in order to keep his dictatorship afloat.

Jim Clancy, CNN, Seoul.

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BLITZER: Let's go to David McKenzie right now in Beijing. What's going on over there? Because everyone seems to think China could play a critically important role if the government in Beijing decided to.

DAVID MCKENZIE, CNN CORRESPONDENT: Well, Wolf, it's a smoggy day here in Beijing, and the mood is certainly darkening here in China, with its close neighbor, longtime ally North Korea, ratcheting up the rhetoric, and even making moves, potentially, for a missile strike.

The key may be China, Wolf, with China having a lot of influence over Pyongyang. They could literally close the taps, the fuel taps, and even those conventional military ties between the two countries.

A lot of frustration here in Beijing, with North Korea, though, in recent months, particularly with that missile strike -- that missile test, and nuclear test. Their frustrations might be boiling over, and they could be pushing for North Korea to get to the negotiating table -- Wolf.

BLITZER: David McKenzie in Beijing for us there, watching it very closely. Thank you.

I was in North Korea just two years ago. Stand by for a rare look.

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BLITZER: For all North Korea's threats and its military power, its people don't have much. They live under very difficult conditions. I got a rare look inside the secretive nation when I traveled there at the end of 2010.

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BLITZER: Well, thank you so much.

(voice-over): During my six days of North Korea, I didn't see a whole lot of color unless you count the propaganda posters. We visited in the winter when buildings often go unheated. In this school, it's so cold in the classroom you could see their breath. Even today top leaders, like Kim Jong-Un and his generals, often wear overcoats indoors.

Why the hardships? Because so much of their limited money goes to the military. According to the CIA, North Korea industry is crippled, and there are chronic food shortages.

KONGDAN OR, AUTHOR: Basically it's a starving country. Always they are looking for better, better food. And where is something to eat, to fill my stomach?

BLITZER: Starvation reportedly killed up to two million people in the 1990s. This 24-year-old defected from North Korea six years ago.

UNIDENTIFIED FEMALE (through translator): You can see dead people everywhere on the street.

BLITZER: In this satellite photo, South Korea is blazing with lights at night. But North Korea is pitch black, except for the capitol. That capital, Pyongyang, is the home of top government officials with good salaries and impressive offices.

(on camera): We're on top of the world's tallest stone tower here overlooking Pyongyang. And it really is majestic to see what's going on. You see the river. You see the bitter cold, freezing snow.

The buildings are really impressive to see what's going on here in the North Korean capital.

(voice-over): But one thing we noticed, not a lot of people with cars.

(on camera): There's not a whole lot of traffic here. It's icy here. The streets are icy. It's snowing. You see a lot of people shoveling. And there you see the hammer and sickle of this communist government, manifestations of the communist philosophy.

(voice-over): The subway is clean and orderly, although the lights don't always stay on. It's very deep underground. It doubles as a bomb shelter. And it's filled with propaganda pictures and even patriotic music.

(on camera): We're moving now. It's pretty smooth.

(voice-over): In spite of all the propaganda, analysts say, the population may be getting other glimpses of the world.

OR: The younger generations are very skillfully adapting using the internet and gaining the momentum and finding the information. And they finally are asking, North Korea is not paradise on earth. It's actually hell on earth. Why are we living like this?

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BLITZER: Tough situation right now. We'll stay on top of it for you, for our viewers in the United States and around the world. Remember, you can always follow what's going on in THE SITUATION ROOM. On Twitter, you can tweet me @wolfblitzer. You can tweet the show @CNNsitroom. You can like us on Facebook.

Thanks very much for watching. I'm Wolf Blitzer in THE SITUATION ROOM. The news continues next on CNN.